And the Very Platinum Truth Comes Out [Law360]

Ex-Platinum CFO Troubled By Business Methods, Jury Hears

By Stewart Bishop

Law360, New York (May 23, 2019, 8:38 PM EDT) — A former chief financial officer of Platinum Partners on Thursday told a New York federal jury weighing the fate of the hedge fund manager’s former top executives of his unease with the company’s problematic business practices and lack of cash to fund operations and pay back investors.

Daniel Mandelbaum, 42, took the witness stand in the late afternoon in the monthlong trial of Platinum founder Mark Nordlicht, former co-chief investment officer David Levy and ex-chief financial officer Joseph SanFilippo, who stand accused of defrauding investors.

Mandelbaum, who said he worked at Platinum for a scant 9 1/2 months, testified of how he became “very uncomfortable” with Platinum’s way of doing business after taking the CFO job in late 2014 at the urging of his friend and Platinum chief operating officer Naftali Manela, who pled guilty in 2016.

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ADDITIONAL INFORMATION:

Re: The hiring by Platinum of Daniel Mandelbaum was highly regarded and announced:

Platinum Partners Appoints Chief Financial Officer

April 06, 2015 12:00 PM Eastern Daylight Time

NEW YORK–(BUSINESS WIRE)–Platinum Partners, a New York-based hedge fund adviser, is pleased to announce the appointment of Daniel Mandelbaum to the role of Chief Financial Officer. Bringing with him sixteen years of hedge fund experience, Mr. Mandelbaum is responsible for overseeing the firm’s financial and reporting functions.

“We are delighted that Daniel has joined Platinum, adding technical operations knowledge that will both enhance and strengthen the firm’s financial infrastructure”

Tweet this“We are delighted that Daniel has joined Platinum, adding technical operations knowledge that will both enhance and strengthen the firm’s financial infrastructure,” said Mark Nordlicht, Chairman and Co-Chief Investment Officer of Platinum Partners. “His appointment is indicative of our commitment to maintaining a superior leadership team in order to meet the evolving needs of our investors.”

Prior to joining Platinum Partners, Mr. Mandelbaum served as Chief Financial Officer and Chief Operating Officer for Royal Capital Management, LLC, a New York City-based fundamental long/short equity firm, where he worked for thirteen years. During his tenure he was responsible for overseeing all business development as well as financial, tax, operational and compliance issues.

Mr. Mandelbaum is a Certified Public Accountant, and began his career in Capital Markets group for PricewaterhouseCoopers where he focused primarily on auditing hedge funds.

About Platinum Partners

Platinum Partners (the “Firm”) is a New York based investment management group with more than $1 Billion in assets under management. The Firm was founded in 2003 by Mark Nordlicht, an investor with over twenty years of experience in the asset management space.

Contacts

For Platinum Partners:
Cary Ruterman, 212-279-3115 ext. 123
cruterman@prosek.com

A Platinum Settlement with Obex – from Law360

LAW360

ED&F Settles Platinum Hedge Fund Collapse Case With Broker

By Najiyya Budaly

Law360, London (May 20, 2019, 2:42 PM BST) — ED&F Man Capital Markets has settled its case accusing a New York investment firm of knowingly setting the global brokerage up with failing hedge fund Platinum Partners, which lost ED&F approximately $3 million.

ED&F has reached a confidential settlement with U.S.-based Obex Securities LLC, Deputy Master Hansen said in an order published Wednesday. The capital markets unit had alleged that Obex knew that investment company Platinum Partners was insolvent when introducing it to ED&F as a customer in 2015, but pursued the deal for the introduction fee anyway.

“All further proceedings in this action be stayed upon the terms set out in the … settlement agreement between the parties,” the judge said in the consent order, adding that the parties had reached a settlement on April 23.

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Nordlicht v. Federal Bureau of Prisons – FOIA Request for FBI Records

Are FBI Records Not Private? Mark Nordlicht Trying to Ascertain Whether Records Were Leaked to the Press?

 

To View these Records Click here.

Case Title	NORDLICHT v. FEDERAL BUREAU OF PRISONS
District	District of Columbia
City	Washington, DC
Case Number	1:2018cv02626
Date Filed	2018-11-14
Date Closed	2019-04-03
Judge	Judge James E. Boasberg
Plaintiff	MARK NORDLICHT
Case Description	Mark Nordlicht, who was one of the subjects of an investigation in the Eastern District of New York, submitted a FOIA request to the FBI for records concerning communications between five named individuals and the New York Post, the Wall Street Journal, Bloomberg News, or Reuters during 2016. The agency acknowledged receipt of the request and denied the request on the basis of Exemption 6 (invasion of privacy) and Exemption 7(C) (invasion of privacy concerning law enforcement records). Nordlicht then filed suit. Complaint issues: Litigation – Attorney’s fees
Defendant	FEDERAL BUREAU OF INVESTIGATION
Defendant	FEDERAL BUREAU OF PRISONS
Documents	Docket Complaint Complaint attachment 1
User-contributed Documents
Docket Events (Hide)
Date Filed Doc # Docket Text 2018-11-14 1 COMPLAINT against FEDERAL BUREAU OF INVESTIGATION ( Filing fee $ 400, receipt number 4616095482) filed by MARK NORDLICHT. (Attachments: # 1 Civil Cover Sheet)(ztd); Modified on 12/4/2018 to correct Defendant’s name (ztth). (Entered: 11/16/2018) 2018-11-14 2 NOTICE OF RELATED CASE by MARK NORDLICHT. Case related to Case No. 18-403. (ztd) (Entered: 11/16/2018) 2018-11-15 SUMMONS (3) Issued as to FEDERAL BUREAU OF INVESTIGATION, U.S. Attorney and U.S. Attorney General (ztd) Modified on 12/4/2018 to correct Defendant’s name (ztth). (Entered: 11/16/2018) 2018-11-19 3 RETURN OF SERVICE/AFFIDAVIT of Summons and Complaint Executed as to the United States Attorney. Date of Service Upon United States Attorney on 11/16/2018. ( Answer due for ALL FEDERAL DEFENDANTS by 12/16/2018.), RETURN OF SERVICE/AFFIDAVIT of Summons and Complaint Executed on United States Attorney General. Date of Service Upon United States Attorney General 11/16/18. (ztd) (Entered: 11/30/2018) 2018-11-26 4 RETURN OF SERVICE/AFFIDAVIT of Summons and Complaint Executed. FEDERAL BUREAU OF INVESTIGATION served on 11/20/2018. (tth) (Entered: 12/04/2018) 2018-12-17 5 ANSWER to Complaint by FEDERAL BUREAU OF INVESTIGATION.(Simon, Jeremy) (Entered: 12/17/2018) 2018-12-17 MINUTE ORDER: The Court ORDERS that the parties shall meet, confer, and submit a joint proposed briefing schedule by January 7, 2019. So ORDERED by Judge James E. Boasberg on 12/17/2018. (lcjeb2) (Entered: 12/17/2018) 2018-12-17 Set/Reset Deadlines: Joint Proposed Briefing Schedule due by 1/7/2019. (znbn) (Entered: 12/18/2018) 2019-01-04 6 MOTION to Stay in Light of Lapse in Appropriations by FEDERAL BUREAU OF INVESTIGATION (Simon, Jeremy) (Entered: 01/04/2019) 2019-01-07 MINUTE ORDER GRANTING 6 Motion to Stay. So ORDERED by Judge James E. Boasberg on 1/7/2019. (lcjeb1) (Entered: 01/07/2019) 2019-01-29 7 NOTICE of Restored Government Funding by FEDERAL BUREAU OF INVESTIGATION (Simon, Jeremy) (Entered: 01/29/2019) 2019-02-06 MINUTE ORDER: The Court lift the stay entered on 1/7/2019 and ORDERS that the parties shall submit a joint proposed briefing schedule by February 20, 2019. So ORDERED by Judge James E. Boasberg on 2/6/2019. (lcjeb1) Modified on 2/6/2019 (zlsj). (Entered: 02/06/2019) 2019-02-06 Set/Reset Deadlines: Joint Proposed Briefing Schedule due by 2/20/2019 (lsj) (Entered: 02/06/2019) 2019-02-19 8 Joint STATUS REPORT by FEDERAL BUREAU OF INVESTIGATION. (Simon, Jeremy) (Entered: 02/19/2019) 2019-02-19 MINUTE ORDER ADOPTING the parties’ 8 Joint Status Report. The Court ORDERS that: 1) Defendant’s Motion for Summary Judgment shall be due May 2, 2019; 2) Plaintiff’s Opposition shall be due May 23, 2019; and 3) Defendant’s Reply shall be due June 6, 2019. So ORDERED by Judge James E. Boasberg on 2/19/2019. (lcjeb1) (Entered: 02/19/2019) 2019-02-19 Set/Reset Deadlines: Summary Judgment motions due by 5/2/2019. Response to Motion for Summary Judgment due by 5/23/2019. Reply to Motion for Summary Judgment due by 6/6/2019. (znbn) (Entered: 02/21/2019) 2019-04-03 9 STIPULATION of Dismissal by FEDERAL BUREAU OF INVESTIGATION. (Simon, Jeremy) (Entered: 04/03/2019) 2019-04-03 MINUTE ORDER: Per the parties’ 9 Stipulation, the Court ORDERS that the case is DISMISSED WITH PREJUDICE. So ORDERED by Judge James E. Boasberg on 4/3/2019. (lcjeb1) (Entered: 04/03/2019)  Hide Docket Events

Black Elk, David Levy and “So What if it’s Fraud?” – The Black Elk Story Continued

David Levy, Black Elk and a Fraud Perpetrated Upon Shareholders in Brazen Fashion…

 

Dear Readers:

We told this story long ago and uncovering the fraud perpetrated upon the Black Elk shareholders has been one of the many things we have focused since our inception. We did not envision that the day would come when it would be laid out in black and white before the court. The below is a copy of the transcript, stating in pertinent part, everything we already knew. Read on.

David Levy Fraud, Black Elk

A Platinum Receivership – The Millions Lost, the Millions Siphoned Off and the Trusts of the Partners who Remain Wealthy

Follow the Platinum Partners’ Money to Distribute Assets to Investors

The Platinum Partners Receivership has been published and it is a treasure trove of information. Due to privacy concerns of some of the investors, a list of investors has not been published but they were likely people who trusted the partners. Allegedly, $300 Million in assets is gone. We believe, those assets can be found in the private wealth of the partners, their families, their children and their yeshivas. We believe that every penny should be recoverable if the money trail is followed. We also believe that each of the partners should be forced into an involuntary bankruptcy proceeding to provide liquidity to refund the investors. The corporate veil(s), many veils should be broken, wholeheartedly and with gusto. If the partners are allowed to enjoy their wealth as their victims were stripped of the value of their investments, justice will not have been served.

http://docket_pdfs.gcg.net/PTM/16-06848/450_06848.pdf

VI. LIABILITIES OF THE RECEIVERSHIP ESTATE

Pursuant to Paragraph 47 of the Receiver Order, below, please find a description of the
Receivership Estate’s potential liabilities as of December 31, 2018. Certain liabilities described herein, particularly those pertaining to creditor claims, are uncertain, and will remain as such until the Receivership Team concludes its claims analysis and forensic investigative processes.

A. Creditors. The creditor-related information presented below is based on prior management’s books and records, which are as of December 19, 2016, the date Platinum entered receivership. The Receivership Team will test the veracity of these numbers as part of its ongoing forensic investigative and upcoming claims analysis processes. The validity and amount of claims may differ materially from the values reported by prior management.

 PPCO Lenders: PPCO owed $65.9 million to three (3) lenders.
 PPCO Unpaid Redemptions: PPCO owed $28.2 million to 21 PPCO unpaid
redeemers.
 PPLO Unpaid Redemptions: PPLO owed $6.5 million to three (3) PPLO unpaid
redeemers.
 PPCO and PPLO Outstanding Payables: PPCO and PPLO had $2.7 million of
outstanding payables attributable to 23 vendors.

Case 1:16-cv-06848-BMC Document 450 Filed 01/23/19 Page 33 of 37 PageID #: 11118
34

B. Accrued Administrative Expenses. As of December 31, 2018, accrued, unpaid
administrative expenses amount to approximately $4.5 million. These administrative expenses primarily consist of accrued and unpaid professional fees. In addition to these unpaid administrative expenses, the Receivership Estate has budgeted approximately $130,000 per month to pay the remaining in-house Platinum staff and to cover other operating expenses. The Receiver is continually looking to reduce these and other expenses.

C. Disbursements to Preserve the Value of Certain Investments. The Receiver
expects to incur expenses amounting to at least $110,000 per month to preserve the value of the LC Energy investments, pending the conclusion of the associated sales processes. The Receiver expended $386,000 with respect to the LC Energy asset during the Reporting Period.

D. Investors. The Receiver currently believes that there are 286 known investors.
The aggregate net cash invested by investors in the Platinum Entities is approximately $310,000,000. After conferring with the SEC, at this time, to protect the privacy of the investors, the Receiver is not filing with this Fourth Status Report a list of the names of each investor and the amount of such investor’s net cash investment. The actual amount and value of the investors’ claims is ultimately dependent upon the net recovery obtained on Receivership Property. The amount of “net cash invested” may be materially different than the amount ultimately received by the investor.

VII. CLAIMS ANALYSIS

Esformes and Multi-Billion Dollar Fraud Yields Mixed Results from Federal Jury – [Law360]

Feds Get Mixed Results In Esformes Forfeiture Bid

By Nathan Hale

Law360, Miami (April 9, 2019, 8:28 PM EDT) — A federal jury found Tuesday that nursing home mogul Philip Esformes should forfeit his interests in the operating companies for seven Miami-area facilities after his conviction for money laundering, but didn’t give the government most of the assets it sought.

Esformes’ counsel Roy Black of Black Srebnick Kornspan & Stumpf PA said the outcome exceeded the defense’s expectations, as the government effectively came away with only the operating licenses for the facilities but none of the various physical assets it sought, including money in various bank accounts and Esformes’ interests in the businesses’ real estate and several personal properties.

“Definitely, we did far better than we thought we would based on the counts of conviction,” Black told Law360.

The jury’s ruling in this second phase of the case continued a streak of mixed results for the government, despite prosecutors securing a significant conviction overall. The jury found Esformes, 50, guilty Friday on 20 counts of paying and receiving kickbacks, money laundering, bribery, and obstruction of justice at the end of a two-month criminal trial, but the convictions lacked any substantive health care fraud charges, even after the government consistently billed the case as the largest health care fraud case in history.

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Read more at: https://www.law360.com/florida/articles/1148284/feds-get-mixed-results-in-esformes-forfeiture-bid?copied=1

Esformes Convicted – New York’s Versions of Esformes Need to be Prosecuted – Tish James Are you In?

‘Parasite’ Esformes convicted in $1.3B nursing home fraud, could face remaining years in prison

Marty Stempniak

Follow @mstempniak

 

Florida long-term care business mogul Philip Esformes faces the possibility of decades in prison after being convicted Friday in the largest healthcare fraud scheme ever charged by the U.S. Justice Department.

A 12-person jury deliberated for four days last week before agreeing that the 50-year-old entrepreneur was guilty on 20 out of 26 charges. Those include paying and receiving kickbacks, money laundering and conspiracy to commit federal program bribery. Jurors did not, however, reach a verdict on the main count — that Esformes conspired to defraud Medicare.

Prosecutors blasted Esformes following the conclusion of the eight-week trial for the $1.3 billion scheme to defraud both Medicare and Medicaid, calling him a “despicable,” “vampire” who was fueled by “unbounded greed.”

“Even beyond the vital dollars lost … Esformes exploited and victimized patients by providing inadequate medical care and poor conditions in his nursing homes,” Shimon Richmond, special agent in charge of the U.S. Department of Health and Human Services Office of Inspector General’s Miami Regional Office, said in a statement. “We will continue the fight against such parasites.”

Sentencing has not been scheduled yet, but according to past reports, if convicted, Esformes could stand to face decades in prison.

He was first arrested in July 2016 and has been held without bond since. He could spend the rest of his life in prison, even without a healthcare fraud conspiracy, the Miami Herald said Friday.

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TOPICS:

MEDICARE FRAUD PHILIP ESFORMES